Business financing options, explained simply
Six ways to finance a business, in plain language — what each one actually is, who it's built for, and how to tell them apart before you apply anywhere.
Fundur is a financing marketplace, not a lender. Checking your options with Fundur won’t affect your credit score.
What's actually going on?
Nobody wakes up wanting a loan. You have a specific problem with a dollar amount attached to it. Find yours — the financing question tends to answer itself once the problem is clear.
A defined, short-term gap between a cost and the revenue that covers it — the exact shape of a working capital loan. If the gap keeps reopening, payroll financing sets out the routes by cause.
You already own the asset — an approved invoice. Invoice factoring turns it into cash now instead of in two months.
A specific asset purchase. Equipment financing is usually the cheaper route, because the equipment itself secures the loan.
A need that repeats but doesn't repeat predictably. A business line of credit accrues no interest when you're not using it. Where the cash is going into stock, inventory financing covers what that costs to carry.
A long-horizon investment where the lowest total cost matters more than speed. That's squarely an SBA loan. SBA pricing follows its own rules — federal rate caps plus a guaranty fee, set out in SBA loan rates and fees.
A single, defined, planned cost you can name a dollar amount for. A business term loan gives you the lump sum and one predictable payment.
A bounded, time-limited gap with a known end date — another job for a working capital loan, sized to the stretch, not the whole year.
Understanding your financing options
Most people hear "business loan" and picture one thing. In practice it's a toolbox — several genuinely different mechanisms bundled under one word. The differences matter more than which lender you choose, because the wrong shape of money for the right need is the single most expensive mistake a business can make. Four questions separate the six options below — and if you would rather see the numbers first, jump to the side-by-side comparison.
Does it arrive once, or can you draw on it repeatedly?
A lump sum shows up once, in full, and you repay it on a fixed schedule — a working capital loan, a term loan, and equipment financing all work this way. Revolving credit is different: you're given capacity, not cash, and you draw against it only when you need it, repaying and freeing it back up. A business line of credit is the one revolving product in the six.
Revolving capacity shown mid-cycle — drawn, then repaid, then available again.
What convinces the lender to say yes?
Most financing is credit-based — the lender is trusting your business's track record and cash flow. Equipment financing is asset-secured: the equipment itself is the collateral, which is usually why it prices better than an unsecured option for the same purchase. Invoice factoring isn't a loan at all — it's the sale of an asset you already own, an approved invoice, which is why your own credit matters less here than anywhere else in the six.
Secured or unsecured?
Secured financing pledges a specific asset and typically costs less because the lender has somewhere to go if repayment stops. Unsecured financing relies on the business's overall creditworthiness and usually moves faster, since there's no asset to appraise. Equipment financing is the clearest secured product here; working capital loans, lines of credit, and term loans are evaluated primarily on the strength of the business itself. Financing arranged without a specific pledged asset is covered in full on unsecured business loans.
How does speed trade off against cost?
Financing that funds fast is generally priced for that speed. Financing that takes longer to close — more paperwork, a longer underwriting process — is usually the cheapest financing available, because the lender has more time and more certainty to offer a better rate. Where each of the six sits on that trade-off is covered in the comparison below.
Working Capital Loan
A working capital loan is short-term financing that gives your business a lump sum of cash to cover everyday operating costs — payroll, rent, inventory, and similar bills — during the stretch when expenses come due before your revenue arrives.
It shows up as one deposit and leaves as fixed payments on a schedule you know from day one. It's built for a gap you can point to and explain — not for buying something that will still be around in five years.
A specific, time-bounded cash gap, with revenue already coming in.
Buying equipment or funding a multi-year investment — costlier money for the wrong horizon.
Business Line of Credit
A business line of credit is a flexible form of revolving financing that gives your company access to a set credit limit — you can borrow against it whenever you need it, and interest runs only on what you draw.
You're approved for a limit once, then draw against it — and repay it — as many times as the need repeats. Undrawn capacity accrues no interest, which is the entire point.
Costs that repeat but vary — materials, inventory, payroll timing that shifts month to month.
A single, large, one-time investment — a line refills for the next need, which isn't what a big purchase requires.
Business Term Loan
A business term loan is a form of financing that gives your company a single lump sum of capital up front — your loan amount — which you repay in fixed installments over a set period of time, called the term.
You get the whole amount up front and pay it down in equal installments. The payment is the same in month one as it is in the final month — that predictability is the entire point.
A single, defined, planned investment you can already put a number on.
A need that repeats or whose size you can't predict yet — a line of credit fits that better.
Equipment Financing
Equipment financing is business funding used to buy a specific piece of equipment — and the equipment itself typically serves as the collateral.
The loan is sized to the purchase, and the equipment secures it — usually why it prices better than borrowing the same amount unsecured.
Buying a specific, identifiable piece of equipment or vehicle.
Operating costs unrelated to a physical asset — that's a working capital loan or line of credit's job.
Invoice Factoring
Invoice factoring is a way to get paid early for work you've already done.
You're not borrowing against your own credit — you're selling an invoice you've already earned. Most of its value lands almost immediately; the rest follows, minus a fee, once your customer pays.
B2B or B2G businesses waiting on approved invoices from creditworthy customers.
A business without invoiced customers on payment terms — there's nothing to factor.
SBA Loan
An SBA loan is a small-business loan issued by a bank or online lender and partially guaranteed by the U.S. Small Business Administration — a federal agency.
A bank or online lender funds it; the SBA guarantees a share, which is what unlocks a lower rate and a longer term than most businesses can get elsewhere. The trade-off is a slower, more document-heavy process.
A major, long-horizon investment where total cost matters more than speed.
Anything urgent — the timeline rules it out for a same-week need.
These six cover the large majority of what small businesses actually need to finance. A few adjacent terms you'll see elsewhere — merchant cash advances, commercial real estate loans, franchise-specific financing — aren't part of Fundur's six; the FAQ below covers how, and whether, they relate. If you've been offered financing repaid from a share of your sales, how revenue-based financing works walks through the mechanics. If an offer is quoted as a multiplier rather than a rate, the factor rate calculator converts it to an APR. And where you see financing sold as a “short-term business loan”, that phrase describes the repayment window rather than a separate product — short-term business loans sets out which of these structures fall inside it, and what a shorter term does to the cost.
How the six actually compare
Most “compare business loans” guides mean comparing lenders — this bank's rate against that one. That's a real step, but it's not the first one. Before you shop lenders, it helps to know how the structures differ, because the wrong structure costs more than a slightly worse rate on the right one. The table below sets out what each one is sized on, how fast it moves, how it is repaid, how it is priced, and what it is built for. Read across the row you're weighing.
| Financing type | Amount | Funding speed | Term & structure | Cost structure | Best for |
|---|---|---|---|---|---|
| Working Capital LoanBacked by business creditworthiness | AmountUp to $500,000Fundur's published maximum. No minimum is published. | Funding speedFastestOften as fast as 24 hours | Term & structureFixed termOne lump sum, repaid in equal instalments — commonly over 3 to 24 months, weekly or monthly. | Cost structureInterest rate or factor rateWhich one you are quoted depends on the lender. A one-time origination fee is common. | Best forA specific, dated cash gap, with revenue already coming in. |
| Business Line of CreditBacked by business creditworthiness | AmountUp to $750,000Fundur's published maximum credit line. No minimum is published. | Funding speedFastestDraws can reach your account as soon as the same day | Term & structureRevolvingDraw, repay and draw again without reapplying. Each draw is repaid on a set schedule — commonly 12, 18, 24 or 36 months. | Cost structureInterest on the drawn balanceAn undrawn line accrues no interest, but draw, maintenance, unused-line or annual fees may apply — ask which. | Best forCosts that repeat but vary in size or timing. |
| Business Term LoanBacked by business creditworthiness | AmountUp to $500,000Fundur's published maximum. No minimum is published. | Funding speedFastApproval often the same day; funds typically within one to a few business days of accepting | Term & structureFixed termOne lump sum at closing, then the same payment every month. Common terms run from 12 months to five years, and longer for larger, secured loans. | Cost structureInterest rate, usually fixedCharged on an amortising balance. Origination and closing costs may apply. | Best forOne large, planned investment you can already put a number on. |
| Equipment FinancingBacked by the equipment itself | AmountSized to the equipmentFundur publishes no maximum. Across the wider market, equipment amounts commonly run from about $10,000 to $5 million or more. | Funding speedFastAbout 24–72 hours on smaller, standard deals with strong creditLarger, used or specialised assets — and anything needing an appraisal — take longer. | Term & structureFixed term, matched to the assetRepaid over the equipment's useful life, commonly two to seven years. Down payments commonly range from 0% to 20%. | Cost structureFixed interest rateOften lower than borrowing the same amount unsecured, because the equipment secures it. | Best forBuying one specific machine, vehicle or system. |
| Invoice FactoringBacked by your customer's credit, not yours | AmountBased on the invoices you factorCommonly 80%–90% of face value advanced. There is no fixed ceiling — your eligible invoice book sets the size. | Funding speedFast after setupSetup takes a few days to a couple of weeks; advances on new invoices are then often same-day | Term & structureNo repayment termIt is a sale, not a loan. Each invoice settles when your customer pays — typically Net-30, 60 or 90 — and the reserve is released then. | Cost structureA factoring fee, not an interest rateCharged for each period the invoice stays outstanding — commonly about 1%–4% of invoice value per 30 days. | Best forB2B or B2G work already invoiced to creditworthy customers. |
| SBA LoanBacked by a federal guaranty, plus your business qualifications | Amount$5 million · SBA 7(a)$500,000 · SBA ExpressProgramme ceilings set by statute, not by Fundur — and not an amount every applicant qualifies for. Your figure is set by what your business can support. | Funding speedSlowestTypically 30–90 daysMeasured in weeks, not hours. SBA Express is the faster route at smaller amounts. | Term & structureFixed term, the longest of the sixSet by what the money is for: up to 10 years for working capital, equipment or a business acquisition, and up to 25 years for commercial real estate. | Cost structureA base rate plus a lender spreadUsually Prime plus a spread the lender sets within the SBA's cap, plus a federal guaranty fee — see SBA rates and fees. | Best forA large, long-horizon investment where total cost matters more than speed. |
How to read this table. The three maximums marked as Fundur's are the amounts Fundur publishes on its own product pages; equipment amounts describe the wider lender market rather than a Fundur limit; factoring is sized by a mechanic rather than a ceiling; and the SBA figures are programme maximums fixed by statute. Fundur is a financing marketplace, not a lender — your actual amount, rate, term and fees are set by the individual lender during underwriting and disclosed in full before you accept anything. Funding speed assumes a complete file, and is slower when documents are missing. Rates & costs explains how each pricing method works and how to compare two offers correctly; business loan requirements covers what lenders look for; and how much can I borrow shows the source behind every amount above.
Two pairs come up most often: a line of credit versus a term loan, and invoice factoring versus invoice financing — each is settled in full on the page that owns it rather than repeated here.
Which one fits your situation?
Two ways to get there: the fast version below, or the full picture in the six cards that follow.
The 60-second version
- 1
Need a specific piece of equipment or a vehicle?
→ Equipment Financing - 2
Waiting on an invoice a customer already approved?
→ Invoice Factoring - 3
Costs repeat, but the amount changes every time?
→ Business Line of Credit - 4
One big planned investment — and you can wait 30–90 days for the best rate?
→ SBA Loan - 5
One big planned investment — but you need it sooner?
→ Business Term Loan - 6
A short, specific gap between a cost and your revenue?
→ Working Capital Loan
The full picture
"Payroll's Friday. The money I'm owed isn't here yet."
Built exactly for this — a lump sum that covers the gap and repays on a schedule you already know.
Explore working capital loans"Some months I need cash for supplies. Some months I don't."
No interest until you draw it — built for exactly this kind of on-again, off-again need.
Explore lines of credit"The machine we need costs more than I want to pull from savings."
Sizes the loan to the purchase and uses the equipment as collateral — usually the cheapest way to buy it.
Explore equipment financing"My customer's good for it — they just pay on their own schedule."
Turns an invoice you've already earned into cash now, instead of whenever it's convenient for your customer.
Explore invoice factoring"I know exactly what this expansion costs. I want one predictable payment."
Gives you the full amount up front and one fixed payment for the life of the loan — no surprises to plan around.
Explore term loans"I'm buying the building. I can wait for the better rate."
Trades a longer close for the lowest rate and longest term available — worth it when you're not in a hurry.
Explore SBA loansAsk any lender for two numbers
Whichever option fits, you'll eventually be comparing an actual offer — from Fundur's network or anyone else's. Here's what makes that comparison honest, so you're equipped to judge any offer, not just ours.
An interest rate compounds on a shrinking balance. A factor rate — common on shorter-term products — is a flat multiplier on the full amount, charged whether or not you pay early. The two numbers aren't comparable on their own; convert to a real dollar cost before you decide.
Time in business, revenue consistency, credit profile, and — for secured products — the asset itself. Lenders price risk, not your industry or your intentions.
Origination fees, draw fees, prepayment penalties, and late fees can move the real cost of an offer more than the headline rate does.
A short-term product stretched to cover a long-term need gets expensive fast. A long-term product for a short-term need locks up capital you didn't need to commit.
Before you sign anything, ask for two numbers, in writing: the total dollar amount you'll repay, and the APR. If a lender won't give you both plainly, that's the answer.
Rates and fees vary by lender and by business, and any figures shown are illustrative. Your actual terms are determined during underwriting and disclosed in full before you accept.
Talk to a person, not a form
A funding advisor will walk through your situation and point you to the option that actually fits — and will tell you plainly if now isn't the right time to borrow at all.
See my optionsThe main types of business loans, and where Fundur's six sit
"Types of business loans" is a longer list than the six above, because the market names products by what they are for as often as by how they work. This table puts the common names side by side, says what each one actually is, and is honest about which of them Fundur arranges and which it does not.
Scroll sideways to see all four columns
| Type | What it actually is | Typically used for | Through Fundur? |
|---|---|---|---|
| Business term loan | A lump sum repaid in fixed installments, commonly over one to five years and longer when secured. | One planned, sized investment. | Yes — business term loan |
| Business line of credit | An approved limit you draw against, repay and draw again; interest only on what is drawn. | Costs that repeat or cannot be sized in advance. | Yes — business line of credit |
| Working capital loan | A short-term lump sum with weekly or monthly payments over a fixed schedule. | A dated gap in operating cash. | Yes — working capital loan |
| Short-term business loan | A repayment window of roughly three to twenty-four months rather than a separate product; several structures fall inside it. | Anything the window fits. | Category — which structures count |
| SBA 7(a) loan | A loan from a bank or online lender, partly guaranteed by the federal government, with terms that can run to ten or twenty-five years. | The lowest cost, when speed matters less. | Yes — SBA loan; faster at smaller amounts under SBA Express |
| Equipment financing | A loan or lease secured by the equipment being bought, repaid over the asset's useful life. | Buying a specific machine, vehicle or system. | Yes — equipment financing |
| Invoice factoring | The sale of approved invoices at a discount for cash now. Not a loan, so your customers' credit matters more than yours. | Money you are already owed. | Yes — invoice factoring |
| Revenue-based financing | An advance repaid through fixed daily or weekly debits, or a share of sales, priced with a factor rate rather than an interest rate. | Fast capital when the structures above are out of reach. | Yes — revenue-based financing |
| Business acquisition loan | A term or SBA structure sized to a purchase price, underwritten on the target's cash flow as well as yours. | Buying an existing business. | Yes — business acquisition loan |
| Inventory or payroll financing | Working-capital structures sized to one named use, with the repayment timed to when that use pays back. | Stock ahead of a season; a payroll date that will not move. | Yes — inventory financing, payroll financing |
| Franchise financing | Not a separate structure. A franchise opening is funded with the products above — commonly an SBA loan for the whole project, equipment financing for the package the franchisor specifies, and working capital for the ramp. | The franchise fee, buildout, equipment and the months before steady trade. | Yes — franchise business loans |
| Commercial real estate loan | A mortgage secured on the property, usually ten to twenty-five years. | Buying or refinancing premises. | Not as a conventional mortgage. An owner-occupied purchase can sometimes fit an SBA loan |
| Business credit card | Card-based revolving credit, priced and managed like consumer credit. | Small, everyday spend. | No |
| Microloan | Small loans, up to $50,000 under the SBA Microloan programme, made through nonprofit community lenders. | Very small or very new businesses. | No — see the SBA Microloan programme |
| "Startup loan" | Not a product. New businesses usually rely on microloans, personal credit or the owner's own capital until there is trading history to underwrite. | Businesses under about six months old. | Generally not yet — see what it takes to see your options |
Names vary by lender and some products are sold under more than one label. Where a product is marked as not arranged through Fundur, that is a statement about Fundur's marketplace, not about whether the product is right for you. Availability, terms and eligibility are set by the individual lender or programme, and a few states add their own disclosure or registration rules for commercial financing — business loans by state summarises what applies where your business is registered. The Texas, California and Florida guides are a good place to start.
Banks and non-bank lenders decline for different reasons
“Alternative”, “private” and “non-bank” lender all describe the same thing: a lender that is not a bank. The distinction matters because the two kinds run fundamentally different underwriting, and a file that fails one can pass the other without anything about the business changing.
A bank underwrites the balance sheet. It wants filed tax returns, two or more years of operating history, and something it can take a security interest in. That is visible in the public record: across SBA 7(a) approvals in FY2020–FY2025, 88.9% of non-revolving loans were secured. Bank-channel lending is asset-backed lending, and the price reflects it — a median initial rate of 8.50% on that same population, repaid over a median of ten years — how long business loans actually run sets out the full distribution.
A non-bank lender underwrites the deposit stream. The question is not what the business owns but what reliably arrives in its account and how consistently. That is why these lenders can decide in hours on bank statements alone, will look at businesses under two years old, and will fund without an asset pledged. It is also why the money costs more: with nothing to repossess, the rate is the only protection against loss.
So the useful question is not “who has the best rate” but which logic your business currently fits. Strong assets, long history and time to wait point to the bank channel. Strong and steady deposits, a thin balance sheet, or a deadline point to the non-bank channel. A business can move from the second to the first as it ages, and many do — that transition is usually worth more than any single rate negotiation.
Neither channel is a category of last resort, and neither is automatically cheaper once the whole cost is counted. What decides it is which set of evidence your business can actually produce today. What each provider category is strongest and weakest on is set out on our business line of credit page, and if you are weighing whether to go through an intermediary at all, what a business loan broker does covers how that side is paid.
SBA figures: U.S. Small Business Administration FOIA 7(a) FY2020–Present data file as of 30 June 2026, analysed by Fundur — 7(a) approvals FY2020–FY2025 excluding cancelled loans and duplicate rows. SBA-guaranteed lending is bank-originated and is used here as the best public record of bank-channel underwriting; it is not a description of non-bank terms. Fundur is not an SBA lender.
From application to funded — without shopping lenders one by one
This is the step Fundur actually replaces: the part where you'd otherwise call five lenders yourself and fill out five applications to compare five answers.
Apply once
Tell us what you need. One form covers all six products — you don't have to pick one before you've talked to anyone.
Matched to real lenders
Your business is checked against Fundur's lender network, not one company's single yes-or-no.
Compare actual offers
See real terms side by side. Ask for the two numbers — total repaid and APR — before you decide anything.
Funded
Timelines vary by product — from within a day for working capital and lines of credit, to 30–90 days for an SBA loan.
Fundur is a financing marketplace, not a lender. We don't make credit decisions or guarantee approval, rates, terms, or funding times.
What it takes to see your options
These four signals get you in the door across all six products. Meeting them doesn't guarantee approval for any one product — it means there's something here worth checking.
Typical signals only — exact thresholds vary by lender and borrower.
These are the typical minimums to see what you qualify for. Requirements vary by product — SBA loans and term loans generally require more time in business and a stronger credit profile. Business loan requirements sets out each signal in full, and what to do if you fall short on one.
What you'll likely be asked to show
- Recent business bank statements (typically 3–4 months)
- Proof of time in business (formation documents or license)
- A government-issued ID
- A voided check, for some products
Exactly what's required depends on the product and lender — the fastest way to get a straight answer for your specific situation is to see your options directly.
See my optionsFrequently asked questions
What's the difference between a business loan and a business line of credit?
What credit score do I need to qualify?
How much can my business borrow?
How fast can I actually get funded?
Do I need collateral?
Will checking my options hurt my credit score?
Is Fundur a lender?
What's the difference between invoice factoring and invoice financing?
Is a merchant cash advance the same as a working capital loan?
Does Fundur offer business grants?
How is this different from just going to my own bank?
Does Fundur offer equity or investment funding?
What's the difference between a term loan and an SBA loan?
How long does the whole application process take?
See your real options — not a guess
One application. All six products considered. Checking with Fundur won’t affect your credit.
Fundur is a financing marketplace, not a lender. Checking your options with Fundur won’t affect your credit score.